The market is weakening, but these 5 stocks are close to buying points
What is your game plan for the coming week? Be careful about new purchases focusing on popular sectors. The earnings season adds even more uncertainty Tesla (TSLA) Big week title of results.
Expedia (EXPE), Cheyenne Energy (LNG), Merck (MRK), Edwards Life Sciences (EW) And Checkpoint software (CHKP) Five stocks near buy points from relatively strong areas of the market. EXPE stock is part of the latest travel recovery. LNG stock is a leader in the still hot energy sector. Merck Stock and Edwards Life Sciences are part of the healthy medical field. CHKP is at the forefront of stock cybersecurity space, a tech pocket.
Tesla stock, for its part, is working on a cup-with-handle buying point, but one of the many risks in focus is to confuse the chart with earnings.
The video embedded in the article discusses weekly market activity and analyzes EXPE stock, Cheyenne Energy and Checkpoint software.
Dow Jones Futures Today
Dow Jones Futures, along with the S&P 500 futures and the Nasdaq 100 futures, will open at 6pm ET on Sunday.
US stock markets will close on April 15 during Good Friday. Stock markets in Europe, Australia and Hong Kong are closed on Fridays and Mondays.
The People’s Bank of China on Friday kept its one-year medium-term lending rate stable at 2.85%. Many economists expect cuts at this crucial rate to strengthen the economy amid widespread lockdowns.
Keep in mind that overnight action on Dow Futures and elsewhere will not necessarily translate into actual trading in the next general stock market session.
Stock market rally
The stock market rally had some big daily and intraday movements in the short week, but the overall trend was bearish. The Dow Jones Industrial Average fell 0.8% in stock market trading last week. The S&P 500 index was down 2.1%. The Nasdaq Composite lost 2.6%. Small-cap Russell 2000 gained 0.5%.
10-year Treasury yields rallied 12 basis points to 2.83%, the highest level since late 2018.
US crude oil futures rose nearly 9% to $ 106.95 a barrel last week. The European Union is drawing up plans to ban Russia’s crude oil, the New York Times reported on Thursday, particularly the painful economic phase that Germany has resisted. The EU will not formally discuss Russia’s crude ban until the final round of the French presidential election on April 24. If the EU moves forward, crude oil prices may rise. EU Russia more dependent on natural gas.
Among the best ETFs, the Innovator IBD 50 ETF (FFTY) Innovator IBD Breakout Chances ETF (0.2%) Last WeekBOUTIShares expands 0.8% on expanded tech-software sector ETF (VAT) Fell 2.1%. VanEck Vectors Semiconductor ETF (SMH) Skid 3.5%, risking lowering 2022 lows.
SPDR S&P Metals & Mining ETF (XME) Rose 7.3% last week to a recent high. Global X US Infrastructure Development ETF (Pave) Increased by 1.4%. US Global Jets ETF (JETS) Increased by 8%. SPDR S&P Homebuilders ETF (XHB) Closed at the bottom of the break-even. Energy Select SPDR ETF (XLE) 0.4% up and Financial Select SPDR ETF (XLF) 2.6% declined. Healthcare Select Sector SPDR Fund (XLV) Lost 2.9%, but from all-time highs.
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Stocks to watch
EXPE stock rose 6.5% last week to 191.55, regaining its 50-day range. The Expedia stock market has a 204.08 cup-with-handle buy point, according to Smith analysis. Investors can use the top-down sloping trendline to find early entry in 195.
Expedia stock has a revenue ratio of three digits. The most valuable PE stocks have not performed well in recent months. However, this may be an exception as Expedia earnings are likely to skyrocket by 364%.
Expedia stock rose on Wednesday-Thursday along with many other travel stocks Delta Airlines (DAL) Earnings and guidance on Wednesday, the carrier says passengers will be phased out by higher fares. Hilton Worldwide (HLT) And Marriott International (MAR) Cleared official buying points on Thursday, at least intraday, after crossing early entries on Wednesday.
The relative strength of the EXPE stock is far from line consolidation highs, which is a potential concern. RS lines for Marriott and Hilton are at or near maximum. Relative strength lines, the blue lines in the provided charts, track stock performance against the S&P 500 Index.
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LNG stock fell 3.2% to 139.53 last week, but rebounded from its 21-day moving average and 10-week line. This is the second or possibly the third 10-week line test for Chener Energy Stock, but investors can use it to start a smaller position or add a few more shares. LNG stock may be in the process of forming a new base. The RS line is below the maximum levels.
Cheyenne Energy is expected to make huge profits in 2022 as demand for liquefied natural gas grows exponentially worldwide, especially in Europe. The Russia-Ukraine crisis is provoking more interest, but Russia’s gas sanctions are not currently on the table.
Merck stock fell 0.9% last week to 86.91, pausing after a steady rise on the right side of the cup base. MRK stock is currently trading at 91.50, but may have a handle on the daily chart after Monday, giving it an 89.58 entry. Technically, Merck Stock now has a handle on the weekly chart, but it’s just not understandable. Ideally, the Merck stack forms a longer, slightly deeper handle to move weaker holders. But the RS line has already reached a 52-week high.
Edwards Life Sciences stock fell 3.15% last week to 120.02. On the daily chart, EW stock has a cup base with a buying point of 131.83. After Monday, it may have a handle with an official buy point of 125.21. That handle is already on the weekly chart. The RS line for EW stock is already at a record level.
Manufacturers of medical devices and products should see higher demand as power policies return with the Kovid decline.
Checkpoint software stock lost 4 cents to 142.78 last week and has been trading relatively solid over the past few weeks. CHKP is in stock consolidation and can be seen as a flat or shallow cup-with-handle base. Cup-with-handle purchase point 145.64. The downhill trendline from the summit of March offers slightly less entry.
The current base has undergone a lengthy consolidation, which is undoubtedly the beginning of 2021.
Checkpoint revenue growth is very low and is unlikely to improve further. But CHKP stock has a low PE ratio. Palo Alto Networks (PANW), Fast-growing, high PE cyber security play is also good.
Tesla stock fell nearly 4% last week to 985, down more than 5% from the previous week. Upside down, the handle now has some depth, with the TSLA stock moving some weak holders after a powerful run in late March. But the chart is deep and fuzzy. The longer handle, with some tough action, allows it to continue to hold key averages.
Tesla earnings are due out Wednesday night. Investors can expect strong growth for the year, but perhaps Q2 and beyond.
Will the company discuss the impact of the Tesla Shanghai shutdown? The EV giant’s main factory has been closed since March 28 due to the city’s rough Kovid lockdowns, which are unlikely to end anytime soon. The Berlin and Austin plants are growing slowly and it is having a big impact on Q2 production.
Investors will also look for the latest clues about Tesla CyberTruck, Semi and other products. But they may not be enchanted.
Meanwhile, Tesla CEO Elon Musk’s bid Twitter (TWTR) Also potential headwinds. If Musk buys Twitter, he can sell another portion of TSLA stock to pay for it. And running another company can distract Musk.
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Market rally analysis
The stock market rally continues to grow further divided. The Nasdaq Composite fell sharply after falling below its 50-day line the previous week. The S&P 500, now apparently less than its 200-day hold, has also fallen below its 50-day mark.
The broader commodity sector, leading to medicals and defense companies. Insurance companies and REITs are reasonably well off. Travel names are coming up again and again as crude prices reach their March highs and consumers are moving away from goods and willing to pay higher fares.
But Nasdaq lost more than half of its profits at the end of March. Apple (AAPL) And Tesla are caught saying OK, but they do not look particularly attractive. In the case of other megacaps, Microsoft (MSFT), Nvidia (NVDA) And Google Parent Alphabet (Google) Are nearing a recent low. Amazon.com (AMZN) And Facebook Parent Meta Platforms (FB) Have been struggling for months.
The growing-rate environment is harsh for high-value growth stocks. TSLA stock stands out, but this market has not been kind to loan wolf growth.
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What to do now
Divided market rally, some sectors rise and some fall is the hardest trading environment. Investors should keep their exposure light and focus on key sectors. But don’t be overly focused on a specific area. One upside to the re-emergence of travel stocks is that the sector is not correlated with the energy / commodity sector.
With Commodity Play, you can view pullbacks to moving averages as an opportunity to start or add to positions.
Depending on your trading style you may get partial gains on stocks that have increased by 10% or 15% to ensure that you stay away from trades with profit.
Do not be stubborn. If your stocks are not working, especially those in backward areas, minimize your losses and exit. You might expect the big former Growth Leaders to fall no further, but as long as the stock is above zero it could still fall 100%.
Keep creating your watchlists. Purchasing opportunities can come and go quickly, market conditions can change rapidly. So you want to be ready.
The earnings season is set to begin in high gear next week. Find out when your holdings – or key competitors, supplies or customers – report results.
Read the big picture every day to sync with market direction and leading stocks and sectors.
Please follow Ed Carson on Twitter @IBD_ECarson For stock market updates and more.
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